Use Indicator (Dummy) Variables in Multiple Regression

question 8

Multiple Choice

Use indicator (dummy) variables in multiple regression.
-A sample of firms was selected from the high tech industry (Industry = 1) and the
Financial services sector (Industry = 0) . Data were collected on the following variables:
Turnover rate, job growth, number of employees, and innovative index (higher scores
Indicate a more innovative and creative organizational culture) . What does the scatterplot
Below suggest about developing a multiple regression model to predict turnover rate?

• A) Using Job Growth as an indicator variable in this model is appropriate.
• B) Using the interaction term Job Growth*Industry in the model is appropriate.
• C) Using Industry as an indicator variable in this model is appropriate.
• D) Job Growth should not be included in the model as a variable.
• E) None of the above.

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Definitions:

Let the Buyer Beware

A traditional caveat in commerce, indicating that the buyer assumes the risk regarding the quality and condition of the product being sold.

Suppressio Veri

The legal term for the suppression of the truth or withholding relevant information.

Americans with Disabilities Act

A civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public.

Discrimination

Unfair or prejudicial treatment of individuals or groups based on characteristics such as race, gender, age, or sexual orientation.